SBI Magnum Tax Gain Fund is a popular tax saving mutual fund which has been available to retail investors for the last 26 years. This Equity Linked Savings Scheme (ELSS) made its debut in March 1993. Being an ELSS, an investment in this scheme qualifies for a cumulative tax deduction benefit of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. SBI Magnum Tax Gain Fund is a time-tested tax saver fund which has given impressive performance over the last 3 year and 5 year periods.

Key Statistics of SBI Magnum Tax Gain Fund Performance*

Fund Performance

1 Year

3 Year

5 Year

Trailing Returns

-9.52%

9.89%

14.36%

Rolling Returns

-4.26%

13.23%

15.48%

Beta

0.948

0.976

0.997

Jensen’s Alpha

-8.17%

-2.32%

2.07%

Sharpe Ratio

-1.139

0.148

0.388

Sortino Ratio

-0.348

0.100

0.223

*Data Source – Pulse Labs. All data as of January 31, 2019.

Key Details of SBI Magnum Tax Gain Fund

The following are some of the key details of the SBI Magnum Tax Gain Fund as of January 31, 2019:

Inception Date – March, 1993

AUM – Rs. 6,536 crore

Fund Manager – Mr. Dinesh Balachandran (Since September 2016)

Benchmark – S&P BSE 500 Index (TRI)

Expense Ratio – 1.55% (Direct)

SBI Magnum Tax Gain Fund Performance vs Benchmark*

Instrument

1 Year

3 Year

5 Year

SBI Magnum Tax Gain Fund

-9.52%

9.89%

14.36%

Benchmark (S&P BSE 500 Index – TRI)

-5.71%

-13.97%

15.22%

*Data Source – Pulse Labs. All data as of January 31, 2019.

SBI Magnum Tax Gain Fund has given an impressive return of 9.89% against a benchmark return of -13.97% for the 3 year period (as of January 2019). The scheme has outperformed its benchmark during the 3 year period by a massive margin of around 24%. During the 5 year period, this scheme from SBI Mutual Fund yielded a return of 14.36%, which although high, indicates slight underperformance compared to its benchmark return of 15.22% for the same period. The SBI Magnum Tax Gain Fund is an attractive option in the ELSS category which has demonstrated a track record of posting high-returns over the medium and long term.

Asset Allocation of SBI Magnum Tax Gain Fund

The following is the Asset Class-Wise Investment Breakup of SBI Magnum Tax Gain Fund as of January 31, 2019:

Asset Class

Portfolio Allocation (% of total assets)

Large Cap Equities

68.30%

Mid Cap Equities

9.91%

Small Cap Equities

12.32%

Cash/Cash Equivalent Instruments/Short Term Debt

9.47%

*All data as of January 31, 2019.

SBI Magnum Tax Gain Fund is a relatively conservative tax saving fund which has invested a majority of its assets in fundamentally-strong large cap companies. The scheme has further strengthened its conservative stance by investing another 9.47% in cash and debt instruments. The scheme has given an aggressive tint to its portfolio by investing around 9.91% of its assets in mid caps and another 12.32% in small cap companies. The asset allocation of the scheme across market capitalisations makes it a suitable ELSS investment option for investors who are seeking potentially high returns with moderate levels of risk.

The following is a list of the top sectors that the equity portion of the SBI Magnum Tax Gain Fund is invested in as of January 31, 2019:

Investment Sector

% of Assets Allocated

Financial Services

27.37%

Consumer Goods

11.13%

Pharmaceuticals

8.75%

IT

8.24%

Energy

6.99%

*Data as of January 31, 2019.

Contrary to its relatively conservative asset allocation approach across market caps, the scheme follows an aggressive approach in allocation of its assets across sectors. The scheme has given a higher weightage to consumption-driven sectors in its portfolio than defensive sectors. Out of the top 5 sector holdings of the scheme, 3 sectors namely Financial Services (27.37%), Consumer Goods (11.13%) and Energy (6.99%) are cyclical sectors and the remaining two sectors Pharmaceuticals (8.75%) and Energy (8.24%) are defensive sectors.

Top Individual Holdings of SBI Magnum Tax Gain Fund

The following are the top 10 individual equity investments of the SBI Magnum Tax Gain Fund :

Investment Name

Weight in Portfolio (%)

ICICI Bank

5.74%

Infosys

5.39%

HDFC Bank

4.54%

ITC

4.44%

Reliance Industries

4.12%

Axis Bank

3.69%

State Bank of India

3.29%

Larsen & Toubro

3.20%

Ambuja Cements

3.03%

HDFC

2.70%

*Data as of January 31, 2019.

Investment Facts of SBI Magnum Tax Gain Fund

SBI Magnum Tax Gain Fund is a veteran tax saving fund which has been in the space since March 1993.

It is an Equity Linked Savings Scheme, thus, any investment made in it qualifies for a tax deduction of up to Rs. 1.5 lakh (cumulatively) under Section 80C of the Income Tax Act.

The scheme has yielded impressive returns of 9.89% and 14.36% over the last 3 year and 5 year periods respectively (as of January 2019).

It follows a relatively conservative approach in allocation of its assets across market capitalisations as it has invested a majority of its assets in large cap companies which are least vulnerable to stock market and economic changes.

However, in terms of the sector-wise allocation of its assets, the scheme has adopted an aggressive stance as it has invested more of its assets in cyclical sectors than defensive sectors.

SBI Magnum Tax Gain Fund is a suitable scheme for investors who are looking for a tax saving investment instrument featuring the potential of giving high returns while featuring moderately high levels of risk.